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Biodiesel Tax Credit Extension Reintroduced

New legislation brings hope for biodiesel.

Jul 08, 2011

Legislation was introduced in both chambers of Congress to extend the biodiesel tax credit as well as make it more efficient and easier to administer. Bob Worth, vice president of the American Soybean Association and chair of the Biodiesel Task Force, says the bills being introduced are good for soybean growers because the biodiesel tax credit is important. Worth says the tax credit will help biodiesel be competitive in the markets.

The biodiesel industry ground to a halt when the credit was allowed to expire at the end of 2009 and Worth says that is proof the industry needs the credit.

"We had about 60% to 70% of our plants shut down and now we are wrapped up that we have 80 to 90 plants going," Worth said. "So it needs this tax credit to keep our industry going forward and getting stronger. We will not get any new plants going if we don't have this tax credit."

Worth says biodiesel has come a long way as a reliable, renewable fuel. He points out the amount of petroleum-based product that soybean biodiesel replaces.

"We're talking 5%," Worth said. "It doesn't sound like very much but look how many gallons of diesel fuel are burned in the United States every year. If you take petroleum off and replace it with biodiesel that's a lot of barrels of crude."

Worth says studies have shown that biodiesel also adds to the price farmers get for their soybeans.

"The United Soybean Board has some studies and it varies a lot;some studies show 15 cents some studies show $2.50," Worth said. "Not only is biodiesel good for us as agriculture people, but it's also very good for livestock people. Tthat's something people don't realize, that actually cheapens up your soybean meal anywhere from $15 to $50 a ton. They are actually buying soybean meal cheaper with biodiesel so livestock people are really winning with biodiesel."

Worth says it's going to be a challenge to get the legislation through Congress this year given the current economic climate. He says Congress has to realize biodiesel keeps jobs in the United States and keeps the country from depending on foreign countries for oil. With pro-renewable fuel Senators and Representatives, Worth believes the biodiesel industry is in a good place.